Car insurance discounts can trim a little — or a lot — off your auto insurance premium, but it can be difficult to tell if you’re leveraging everything your insurance company offers, and not all auto insurance companies have the same discounts.
But the good news is most car insurance companies give separate discounts for good driving habits, vehicle safety features, a clean driving record, and even certain billing options that reduce your insurance rates. You might even be able to get all of the above.
How much can you save with a car insurance discount?
How much you’ll save with an auto insurance discount varies, but maximum discounts are usually for bundling with other types of insurance, such as homeowners insurance, and for having multiple cars on the same policy. Insurance companies like Allstate and Farmers Insurance also offer big savings for having multiple cars on the same policy.
Many insurance companies offer anywhere from 15% off or about $600 per year in potential savings for bundling and multi-vehicle policies. You’ll also get significant discounts on car insurance rates for being a safe driver with a clean driving record and opting into telematics programs that monitor driving behavior.
Read more: Shocked by a spike in car insurance rates? Here are 8 ways to save money
4 types of common car insurance discounts
The best car insurance discounts are detailed below, but keep in mind that every insurer offers a different discount percentage. For instance, Progressive gives a 10% good student discount in most states while State Farm offers as much as 25% off to teen drivers with good grades.
1. Driving behavior discounts
Because the proof is behind the pedal, most insurers reward drivers for safe driving behaviors. In fact, many insurance companies reserve their deepest discounts on car insurance premiums for safe or low-risk drivers.
Safe driver discount
The definition of a safe driver can depend on the car insurance company, but you’re generally considered eligible for a good driver discount if you’ve been accident-free for five years.
Defensive driving discount
When you get a speeding ticket, some states offer a defensive driving class to remove it from your record. A defensive driving course costs as little as $25, but can earn a 10% discount on your car insurance premium depending on your age and the state you live in.
Low-mileage and usage-based discounts
While usage-based insurance isn’t really a discount, it rewards drivers with premiums that can be 20%-30% lower if they have lower than average mileage on a vehicle.
Read more: How does pay-per-mile car insurance work?
2. Vehicle-based discounts
If your vehicle has certain safety or anti-theft features, there’s a type of discount for that. Here are the vehicle discounts offered by major insurance companies.
Safety feature discounts
From equipment like anti-lock brakes to daytime running lights, discounts for vehicle safety features can really add up. For instance, front seat airbags can earn you a discount on your personal injury protection (PIP) or medical payments.
New car discount
It seems counterintuitive, but there are discounts, sometimes as much as 15% on insurance costs, for vehicles three years old or newer with more advanced safety features.
Although it won’t help your liability and collision coverage, anti-theft devices will typically earn you a discount on comprehensive insurance coverage. Geico offers discounts on cars with anti-theft systems of up to 23%.
As mentioned previously, you’ll score some of the largest discounts for putting more than one vehicle on your car insurance policy. Progressive says a multi-car policy saves their customers an average of 12% on insurance coverage.
3. Driver-based discounts
Sometimes there are rewards just for being who you are. The following driver affiliation discounts offer rate cuts based on customer loyalty, home ownership, and more.
New customer discount
Car insurance quotes have a little extra enticement built into the bottom line thanks to the new customer discount (sometimes called an early quote discount), which incentivizes drivers to switch insurance companies.
Customer loyalty discounts
Loyalty rewards are everywhere and insurance companies are no exception. However, be aware that loyalty discounts alone rarely add up enough to justify remaining with a company.
Military, veteran, and federal employee discounts
Insurance discounts to thank military members and their families for service are commonplace. Geico offers an “eagle rate” of 12% savings for federal employees and a 15% discount for active duty and retired military.
Like many insurance companies, Progressive offers a 10% good student discount for adding a young driver to your policy who maintains a B average or better. There are also student away-at-school discounts for college drivers who stay on the policy but leave their cars parked at home.
Even if you don’t bundle your homeowners or renters insurance with your auto insurance, you may still be eligible for a homeowners discount of up to 10% on your car insurance premium.
Alumni and professional organization discounts
For some professional organizations like alumni associations, membership has its benefits. These membership discounts are typically smaller, but it’s still worthwhile to check if an organization you support or work for has any available discounts with an auto insurer.
4. Policy and billing discounts
Make it easier on your insurance company and they’ll reward you with rates that are easier on your wallet.
Multi-policy discounts, also known as bundling discounts, are some of the most significant rate cuts reserved for customers who get a policy for auto insurance and another type of insurance (usually homeowners insurance or motorcycle insurance) with the same company.
If you’ve been diligent about never letting coverage lapse, some insurance companies like Progressive will provide a discount even if you haven’t stayed with the same insurer.
Paid in full discount
Have the extra cash on hand to pay for your car insurance premium up front? If so you can probably qualify for a six-month or one-year payment discount.
Paperless billing and electronic funds transfer (EFT) discount
Another way to shave a little extra off is to authorize automatic payments from your bank account and save some trees (and serious hassle) by signing up for paperless billing.
8 tips for getting the best auto insurance discounts
1. Contact your car insurance agent
Maybe you weren’t eligible for a discount when you first got your auto insurance policy, but things change. Some auto insurance discounts are state-specific or even age restricted.
Contact an insurance agent or your insurance company at least once a year to verify you’re leaning into all the discounts currently available.
2. Get quotes from other car insurance companies
The goal is to save money on your car insurance premiums, regardless of discounts. So it pays to shop around and grab quotes from other companies to see if you can lower your rates by switching insurers. Just be sure to shop for similar coverage and watch your deductible.
Read more: How to switch car insurance companies
3. Double up on insurance policies
Bundling auto and home insurance is definitely the way to go for lower rates. Progressive says their customers save up to 20% with these special car insurance discounts while State Farm claims you could save more than $1,073 annually by bundling policies.
4. Keep a clean driving record
No one plans to have an accident or get caught speeding. But remember that safe driving isn’t just an investment in your well-being or that shiny, new car. Your driving history can ultimately reward you with lower car insurance rates.
Read more: Here’s how a DUI impacts your car insurance
5. Consider telematics
Pay-per-mile insurance usually depends on auto insurance companies installing a telematic device that tracks mileage and other driving behaviors. The Insurance Information Institute warns that while most drivers see a reduction in rates, some drivers may see increases due to risky driving behavior or underestimating their mileage.
6. Install safety devices on older cars
Older cars are usually cheaper to insure, but you may face higher costs due to a lack of vehicle safety devices. Installing a few modern conveniences like collision warnings or anti-theft devices on your classic set of wheels can really pay off in terms of both safety and insurance premiums.
7. Tell the kids to get their grades up
Insuring teen drivers is painfully expensive, but high schoolers can chip in even if they don’t have a job by getting grades good enough to earn lower insurance premiums. A good student discount can also apply to college kids as long as they’re full-time students, making it an incentive to stay in school.
Read more: How to find affordable car insurance for teens
8. Keep tabs on your finances
Setting up automatic payments and squirreling away enough to pay your premiums up front can keep your car insurance rates low and your coverage from lapsing. In addition to your driving record, it’s also crucial to keep your credit history clean to earn lower car insurance rates.
Read more: How credit history impact car insurance rates: a comprehensive guide
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.